September 27, 2017
Writing a business plan before starting your business, what you need to know
Early on in Bristol’s first episode of Small Business Revolution, 20 different small business owners were interviewed. We asked each one a series of questions about their business. Almost across the board, when we asked if they had a business plan when they started, the answer was: No!
The entire Deluxe small business marketing team expected the opposite answer. Basically, a good rule of thumb is don’t start a business without a plan.
There are numerous paths to success and yes, many businesses have thrived without having a plan. But if you are going to do it right, a business plan is essential. As our partner Robert Herjavec has said often, if you don’t have a plan for your business, then it is just a hobby.
A solid plan is the foundation to guide you through the process of starting and running your business, as well as growing, which can be one of the hardest tasks. Business plans come in a variety of shapes and sizes – there’s no “one size fits all” – so it’s important to tailor your plan to how you want to run your business as well as a growth strategy.
A business plan should include:
- a summary of what your company is all about
- what are your long-term goals, for six months, a year, five years and beyond
- market and competitive analyses
- marketing plan and financials
In the second episode, Megan and Roland Hems needed to take a step back and determine what they wanted their business to be. Would they take on any repair that came in to Hems Truck and Auto, or would they specialize? Could they determine what repairs made them the most money or would they specialize on hy-rail vehicle fixes? How do they describe themselves? What was their business challenge?
As with anything, it’s important to have goals to work toward. If your plan is to lose weight, set a goal of how much. For the Hems family, their goals when they started 10 years earlier have changed. Today, they need to advertise, establish who they are and continue to provide exceptional customer service.
One of the key bullets above is a market analysis. Does your community need what you are selling? Are there enough customers to support you? Are there competitors already selling what you have? Can you succeed?
Those are all important questions to ask. If Roland Hems decided his goal was to do brake repairs only, that would be a good one to work toward, but only if he knew there weren’t 10 other brake shops within a short drive. What does the competition stand for and how can you differentiate? Those are important things to ask so you’re not saturating the market, especially in a small town.
Marketing is not always top of mind for most business owners, but it is table stakes today to have a website and to know how you show up online. Before Deluxe helped Megan and Roland, if you Googled Hems Truck and Auto, it came up under auto parts. They don’t sell auto parts. That makes it hard for potential customer to find you.
As the Hems found out, they weren’t even paying attention to their marketing or online presence, but now, with the tools the Deluxe team provided them, they not only show up online, but have a great website that helps drive new customers to their shop.
Lastly, financials are key. Understanding key triggers like planned sales, expenses, profitability, etc. are important. Having a general knowledge and understanding of finances doesn’t mean you need an MBA, but you should also not ignore it. If you need help, find professionals who can guide you. As Megan learned, she had a better handle on the finances than she thought.
Overall, it’s important to draft up a business plan when beginning your business, whether formal or not, having a plan in place will help in the long run, or if the Deluxe team decides to stop off in your small town.